Understaffed IRS Is Auditing the Poor, While the Rich Get a Pass

Taxes keep our society and country running, yet working for the IRS remains a thankless job. People of all sorts of political persuasions resent the agency, which has made it easy for the rich to legislatively disempower the tax bureau. An in-depth ProPublica/Atlantic joint investigation found that the IRS is a mess behind the scenes, but not much can be done since Republicans have designed that outcome intentionally.

Over the years, the IRS has gradually seen its budget slashed and workforce diminished. As it stands, it plain doesnít have the resources to conduct the number of audits it should, losing out on hundreds of billions in lost revenue, particularly from rich individuals and businesses that cut corners and donít declare income. In 2017, the IRS conducted 675,000 fewer audits than just seven years before, and itís not because people are being more honest on their tax forms.

Somehow, though, the IRS is still making time to audit poor people. Thatís right, people earning less than $20,000 are more likely to have their taxes undergo scrutiny than those who earn hundreds of thousands.

From an economic standpoint, it obviously makes more sense to devote more time to the richer filers that potentially have more money to recoup, but the IRSís hands are tied because of Congress-passed requirements to prioritize checking on taxpayers who claim the earned income tax credit (EITC.)

By tax agentsí own admission, a lot of the people who incorrectly take the EITC deduction arenít doing so to cheat, but out of a genuine belief that they should qualify. The process to sort out who can claim it/who canít is a long process, eating up a lot of the IRSís incomes.

Meanwhile, if the IRS has to focus on the small audits and doesnít have the time to get around to going after the big fish defrauding the government on a massive scale Ė oh well, guess thatís too bad!

Problematically, the rich have started to pick up on how inadequate the IRS is at now investigating their filings (which generally are much more complicated than the average personís) and are taking more liberties under the accurate belief that theyíre more likely to get away with fudging and withholding.

The IRSís lack of resources has also forced the agency to severely cut down on its investigations into ďnon-filersĒ Ė people and entities that donít file taxes at all. The people who skip paying taxes are the real cheats, but tracking them down is more involved so over a six-year span, the number of non-filer investigations dropped from 2.4 million to 362,000, making it a whole lot easier for people to get away with not paying their taxes at all.

Understandably, although the IRS is hoping for more funding to fix their operations, theyíre avoiding complaining about this too publicly because they know that signaling about its problems will inspire even more people to stiff Uncle Sam.

Alas, the IRS is unlikely to get relief anytime soon because the Republicans in Congress are fine with it this way. They keep writing laws to help rich people avoid paying taxes, so what do they care if more rich people canít cheat? As long as the existing resources are focused on hounding the poor, itís precisely the system they want.

Stop and look at who is in the White House. A president who boasted that not paying taxes made him ďsmartĒ and somehow survived, without any consequences, a highly sourced report that he and his family committed large-scale tax fraud wherein they ripped off the IRS for about half a billion dollars. Sigh.

53 comments

Louise R
Past Member 3 months ago

Thank you

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Lisa M
Lisa M3 months ago

Noted.

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Lisa M
Lisa M3 months ago

Noted.

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hELEN h
hELEN h3 months ago

tyfs

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Freya H
Freya H3 months ago

They could get a lot more money from the rich than from the poor - but the rich have resources, such as fancy-ass lawyers, to protect themselves.

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Mary B
Mary B3 months ago

Are you folks finally ready to do this whole tax thing differently ? The IRS is the collection agency of the Federal Reserve banks, which are private banks. Stop blaming the government for what a private banking system is doing, and GO CHECK OUT THE FAIRTAX.ORG . It's a system of creating a revenue stream via SALES TAX not income tax. There is much info so don't expect it to be any easy read if you want to find out how it will work in a variety of situations, but let it sink in, it's a sales tax not a tax on income. I read about it years ago and it's a bill with it's own number, ready to be up and voted on. Just needs the political will.

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Christine Stewart
Christine Stewart3 months ago

terrible

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Margaret F
Margaret F3 months ago

This situation comes from conservatives being in control. They have wanted to "starve the beast" forever (which means cut funding for government agencies and services). Poor people tend to have specific income like wages, very few deduction choices, so of course they can be singled out for auditing more easily. That does not mean they are going to be in legal trouble. If mistakes are found they can be corrected.

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Dan Blossfeld
Dan Blossfeld3 months ago

Peggy B.,
That is what I herd also. It is not worth it going after Amal potatoes.

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Ruth S
Ruth S3 months ago

Thanks..

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